Cape Town - South Africa’s rand weakened the most among emerging-market currencies before the release of data that may show mining production in Africa’s biggest economy slowed.

The figures may provide evidence of whether the export industry is benefiting from the rand’s 19 percent slump over the past year. Mining commodities account for more than 50 percent of the country’s exports, according to government data.

The rand’s slide today pared the biggest gain in four months on January 10 after a US jobs report missed analysts’ estimates.

“We are waiting for the local data to provide us with evidence of a positive reaction from the economy to the improvement in domestic competitiveness,” Theuns de Wet, head of global markets research at Rand Merchant Bank in Johannesburg, said in a note.

“The evidence has been somewhat disappointing so far.”

The rand declined 0.9 percent to 10.7335 per dollar by 3:46 p.m. in Johannesburg, the most out of 24 emerging-market currencies monitored by Bloomberg.

Yields on benchmark rand bonds due December 2026 dropped two basis points, or 0.02 percentage point, to 8.18 percent, the lowest on a closing basis since December 24.

Mining output increased 7.1 percent in November, compared with growth of 22 percent the previous month, a report may show tomorrow, according to the median estimate of four economists in a Bloomberg survey.

The data “will provide another opportunity to gauge the supply-side response to rand weakness,” de Wet said.


Rate Held


The South African Reserve Bank has left its benchmark repurchase rate at a three-decade low of 5 percent since July 2012 to help stimulate growth.

Even so, the rand’s weakness hasn’t yet improved exports, Governor Gill Marcus said on January 7.

Growth in manufacturing production slowed to 0.3 percent in November from 1.7 percent the previous month, a report showed on January 9.

“The rand remains a vulnerable currency,” George Glynos, an analyst at ETM Analytics in Johannesburg, said in a e-mailed note.

“The rebalancing processes that the country so desperately needs to restore stability remains absent and may necessarily need to be reflected in a currency that weakens a lot further.”

US employers hired 74,000 workers last month, trailing the 197,000 forecast in a Bloomberg survey of economists, a report showed on January 10, casting doubt on the strength of the economy as the Federal Reserve reduces stimulus that helped fuel demand for South African bonds.

Foreign investors have sold a net 6.84 billion rand ($638 million) of South African bonds and equities this year, according to JSE Ltd. data. - Bloomberg News